commute benefits | 511 Contra Costa

How Do You Actually Get Commuter Benefits?

Bike to Work Day at the Mid Market Energizer Station
Bike to Work Day 2010 in San Francisco. Photo credit: Bay Area Fair Trade Coalition
In an earlier post here at 511 Contra Costa we noted that commuter benefits for vanpooling and public transportation had been restored through the American Taxpayer Relief Act of 2012 (HR 8) to be on par with the qualified parking benefit

For the 2013 calendar year:

  • up to $245 per employee withholding per month for vanpool and all public transportation
  • up to $245 per employee withholding per month for qualified parking, or
  • up to $490 per employee withholding per month for both public transportation and qualified parking

This is great news but how does one go about setting aside pre-tax income for a commute benefit? Here are some steps you can take to get started.
First, make sure you’re using a qualifying commute alternative. The benefit is available to commuters who commute to work in a vanpool, use public transit, or pay for qualified parking. (Carpooling does not currently qualify for pre-tax benefits.)
Next, ask your employer if commuter tax benefits are offered; typically Human Resources or Benefits department will know.  If your employer isn’t aware of the benefit, share the IRS Employer’s Tax Guide to Fringe Benefits  with them.
Step three is to set up a payroll withholding for the qualified commute benefit you use. Keep in mind, your employer must have this benefit set up as a pre-tax withholding option in the payroll system.
There is also a benefit for commuting by bicycle though the process is slightly different because unlike other pre-tax commuter benefits the bicycle benefit cannot be withheld from your pay.  See the full tax code here
Note: Withe the passage of California Senate Bill 1339, employers in the nine-county San Francisco Bay Are with 50 ore more employees will be required to offer some sort of commuter benefit – one of the options is to offer employees to withhold pre-tax income for vanpooling, transit or qualified parking.  Look for more information on the roll-out of this bill in summer of  2013.  The Bay Area Air Quality Management District and the Metropolitan Transportation Commission are developing the Rule.
 

New Bay Area Commuter Benefit Policy

Berkeley Bike Lane

With S.B. 1339 passed, are you more likely to pedal as part of your commute?
Photo credit:  Carrie Cizauskas

In September 2012, Governor Brown passed into law S.B. 1339 – legislation that allows the Bay Area Air Quality Management District (BAAQMD) and the Metropolitan Transportation Commission (MTC) to implement a region-wide Bay Area commuter policy benefiting employees who work at least 20 hours per week for an employer with 50 or more full-time employees in the nine-county San Francisco Bay Area. The purpose of the legislation is to encourage commuting by means other than single passenger automobile travel.
While some Bay Area cities already have commuter benefit policies to encourage the use of public transit or bicycling, the passage of S.B. 1339 will require select employers to offer one of the following commute benefits:

  • The option to pay for transit, vanpooling or bicycling expenses with pre-tax dollars, as allowed by IRS Code 132(f) – the Transportation Fringe Benefit
  • A transit or vanpool subsidy of at least $75 per month in 2013 and adjusted annually for inflation thereafter
  • Access to a free shuttle or vanpool operated by or for the employer
  • A customized alternative program by the employer that provides similar benefits in reducing single-occupant vehicles and is approved by MTC or BAAQMD

Read the S.B 1339 FAQs.
Keep your company connected to the latest S.B. 1339 information by signing up for our newsletter.
 
 

New Commuter Incentive Program

a perfectly squared vision of the embarcadero
Market Street, San Francisco. Photo credit: torbakhopper

Head’s up!
511CC has a new commuter incentive program page! Learn how you can partake in the Drive Less Commuter Incentive Program and get a cash reward for switching from commuting in a single-occupant motor vehicle to carpooling, transit, bicycling or walking.
Driving less really can help reduce environmental impacts and relieve traffic congestion for all, even if you only ditch the car once a week for your work commute. So if you need an incentive to join the growing number of people saying good-bye to gridlock and leaving the car at home when commuting, be sure to check out the commuter incentive program.
And who knows, it might permanently change your commuting habits once you realize the many things you can get done – like catching up on reading, get exercise, or check email – when not driving. You might even decide to ditch the car for shorter trips too!

New Limits on Commute Benefits in 2012

Heads up! The IRS Transportation (Commuting) Benefits are set to roll back to pre-2009 levels of $125 per month (adjusted for inflation) for public transit passes and vanpool expenses beginning January 1, 2012. The maximum was temporarily raised to $230 per month under The American Recovery and Reinvestment Act (ARRA) of 2009 and extended under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 to equal the monthly qualified commuter parking limit.
Qualified commuter parking expenses will increase up to $240 per month and qualified bicycle commuting reimbursements will remain unchanged at $20 per month in the new year.
By offering pre-tax commute benefits to employees, employers can save on paying FICA payroll taxes  and employees can take advantage of saving on federal withholding and FICA taxes on the amount deducted. Find out more from these third-party commute benefit administrators: Benefit Resource Inc., Clipper Direct, Edenred USA (Commuter Check), TranBen, TransitCenter (TransitChek), and WageWorks.
Image credit: 401K (Flickr)